A rough part of agency reality is that clients come and go, economies falter, and tough decisions have to be made. When an agency loses a top client, there often isn’t the workload or money to keep a full staff on board. In the past year or so, big-name clients like P&G, Microsoft, and Unilever have scaled back or reorganized their marketing, causing distress among the agencies doing work for them.
These four agencies were forced to cut back staff in recent times due to a variety of reasons, including major client cutbacks.
Ogilvy & Mather announced earlier this month that it would be cutting 33 positions from its L.A. office. That cut accounted for more than half of that office's staff, leaving just 15 to cover the duties there. Staffers affected by the cut will have until Feb. 3 before they are required to leave.
Another WPP agency to make the list is Grey New York. The agency recently had to cut loose 4% of its staff — around 45-60 people. The cuts may seem a bit surprising, especially when you take into account the 350 hires made in the past year after scoring big accounts like Gillette.
However, Grey New York was put in a tough position after the loss of the E*Trade and Energizer accounts. Not only did it lose two big accounts, but another major client, Radio Shack, cut back marketing budgets after its well-publicized financial troubles and the loss of its CFO. Most of the cuts are related to the Energizer account, though, which moved some business to WPP corporate sibling JWT — where Grey plans to try and relocate some of its staff.
Remember that Microsoft reorganization we mentioned earlier? CP&B was one of the agencies affected by those plans, forcing it to cut 10% of its staff. Approximately 65 employees lost their jobs in the agency's U.S. offices.
Last year, CP&B saw its agency fees slashed by Microsoft, and just last week, the tech giant announced it was reviewing its $1.3B marketing business in an attempt to find a holding-company solution. This reorganization puts CP&G’s relationship with Microsoft on rocky ground and is likely the cause for the preemptive layoffs.
The Martin Agency’s June 2013 cut of 13 staffers is the second set of layoffs for the agency in the past couple of years. That most recent round of cuts, according to what the agency told Media Bistro, was a result of several factors, including changing skill sets, clients cutting back, and more.
In 2012, the Martin Agency was forced to make even bigger cuts, resulting in a loss of 6% of the agency’s employees. The first round of cuts was reportedly for similar reasons to 2013’s cuts. It has, however, made 30 staff hires since the 2013 cuts.